When it comes to SPIFFs, the question is not if you should use SPIFFs, it is how and when you should use them. According to Incentive Marketplace Estimate Research, 84% of U.S. businesses use sales incentives. SPIFFs are a common tactic and used across many industries. However, there are several things to consider when thinking about a SPIFF program. Before starting, ensure you’ve identified an overarching strategy and defined your desired outcomes. Consider things like:
• What are the goals for your program?
• What is the product you are considering for a SPIFF and its corresponding sales cycle?
• When are the slowest times of year for sales?
• How will a SPIFF program complement or potentially compete with your other incentive programs?
Once you have clarified your strategy, it time to execute. Here are a few best practices for executing a SPIFF program.
Short-Term or Long-Term
There is no optimal time limit for running a SPIFF. Some companies run them most of the year and others as an additional lever for a particular promotion. Both have pros and cons.
If your goal is to lift sales for a new product launch or increase sales for a promotion, studies show that you should keep SPIFFs short. One to three months max is most effective. Varying your schedules so channel partners do not become too familiar with receiving rewards for sales will help to avoid losing any or all boosts in motivation from a promotion that is advertised as only running for a short time.
If your goal is to encourage ongoing performance for a product or product line, a longer-term SPIFF is in order. Long-term sales incentives are not as common, but they can be effective in increasing brand visibility and to achieve a sales lift on a lagging product. However, you should pause a long-term SPIFF to validate if your strategy is working and delivering your desired outcomes.
Engaging Your Partners
Pick the right partners for your SPIFF programs. You want to ensure your SPIFF is going to move the sales needle. It is important to ensure your partner is an engaged participant. Put parameters on your program so that your SPIFF does not get buried under other priorities. For example, use volume bonuses to reward the retailer/dealer as well as individual front line sales reps. This should serve as motivation to keep the focus on SPIFF results.
There are several factors to optimize your return on investment, such as:
• Make sure SPIFF participants know how to market your product with easy-to-use product benefit materials. Depending on the complexity of your product, you may want to tie SPIFF participation to a training module for eligibility. You don’t want your SPIFF participants to recommend products to consumers that are not right for them.
• Make sure you have a dedicated support team to make onboarding to the program seamless and simple, and ensure questions, troubleshooting and clarifications are addressed promptly.
• Automated SPIFF claim submissions will go a long way in optimizing your program. It not only makes submissions easy for sales reps, it also provides visibility for the retailer/dealer to monitor performance, reporting for the corporate team and an integrated payout process.
• Often recognition associated with a sales incentive can be more valuable than the tangible prize itself. You can leverage the value by some gamification and have bonuses in the form of merchandise or dollars for the top seller or sellers. To provide these programs, make sure you have a solution that accommodates flexible program configurations so you can customize the right incentive for the right partner.
• Make sure you have strong governance and support to avoid the pitfalls of such programs. Unfortunately, fraud happens. With the right tools, including built-in fraud identification and deterrence, this can be minimized.
About Channel Fusion
Channel Fusion specializes in providing custom channel marketing programs, support and expertise that helps brands optimize their channel programs and deliver desired outcomes. By leveraging our integrated platform and flexible development and deployment process, we can deliver tailored and scalable SPIFF solutions quickly and efficiently. If you’d like to learn more about our SPIFF program capabilities and how we deliver desired outcomes, let’s talk.